Stock Market News

Small improvement in rate of loans to Eurozone's private sector

The Eurozone's money supply as measured by the M3 monetary aggregate expanded at a 1% year-on-year clip during the month of May, according to data from the European Central Bank (ECB).

Consensus had been anticipating a rise of 0.8%.

The more widely followed three-month rate of change, which is meant to smooth out monthly fluctuations, gained 0.9%.

The rate of change in the total amount of credit granted to euro area residents stood at -2.3% for the twelve months to May, versus -2.2% in the month before.

Credit to general government clocked in at a -1.4% pace, in comparison to -0.9% in the previous month, while credit to the private sector remained unchanged at -2.5%.

Within the latter category however, and once adjusted for loan sales and securitisations, the annual growth rate of loans was less negative at -1.4% (Barclays Research: -1.4%), up from -1.6% in the month before.

"The Eurozone's credit cycle is turning, but only very gradually. Adjusted for some large securitisations of loans to households in May, the rate of decline of loans to households and non-financial firms eased to -1.4%, its least bad since July last year. [...] As with the recovery itself, the credit cycle remains weak, with loans still contracting on a year-on-year basis, albeit at a weaker pace," wrote Christian Schulz, Senior Economist at Berenberg in reaction to the figures.

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